Support

A cookie is a piece of data stored by your browser or device that helps websites like this one recognize return visitors. We use cookies to give you the best experience on BNA.com. Some cookies are also necessary for the technical operation of our website. If you continue browsing, you agree to this site’s use of cookies.

Marketing Services

Bloomberg Next marketing services allow clients to elevate their brands and extend their reach through our established and trusted expertise, enhanced with engaging event production, appealing design, and compelling messaging.

Deregulation will stimulate the growth of gross domestic product in the U.S., the
White House Council of Economic Advisers concluded in a
report released Oct. 2, though several public-interest groups are dubious.

Excessive regulation is a tax on the economy, costing the U.S. an average of 0.8 percent
of GDP growth per year since 1980, the CEA report said, citing previously published
academic research.

The report was released the same day President Donald Trump had been scheduled to
deliver an address on the benefits of deregulation, which was canceled in the wake
of the mass shooting in Las Vegas.

“Deregulation can unleash the greater potential of the U.S. economy, spurring the
innovation and economic growth necessary to keep the U.S. prosperous, and to empower
its citizens with greater opportunities,” the report said.

Trump’s CEA

The CEA, an agency within the Executive Office of the President, is charged with offering
the president objective economic advice on the formulation of both domestic and international
economic policy.

Current CEA members are Tomas Philipson, Richard Burkhauser and Kevin Hassett, who
was sworn in as CEA’s 29th chairman on Sept. 13, according to the White House. Hassett
previously worked as an economist at the American Enterprise Institute since 1997.

AEI describes itself as a public policy think tank committed to making the intellectual,
moral, and practical case for expanding freedom, increasing individual opportunity,
and strengthening the free enterprise system in America and around the world.

Controversial Research

The CEA report’s chief finding, that excessive regulation depresses GDP growth, is
based on a 2016 Mercatus Center study that was criticized at the time by the public-interest
community, which said it misunderstood the relationship between regulations and the
economy.

James Goodwin, senior policy analyst at the Center for Progressive Reform, critiqued
the Mercatus study in a May 2016
blog post, finding fault with the study’s assumption that the benefits generated by regulations
have no salutary effect on economic growth.

Goodwin argued that workers will be more productive when they and their families are
adequately protected by strong health and safety regulations, which in turn leads
to increased profits and economic growth.

And, in some cases, money spent on regulatory compliance has spurred industries to
make investments that they would not otherwise have made, resulting in increased productivity
and profitability for the sector as a whole, Goodwin said.

Corporate Influence

“It’s deeply troubling to see CEA produce such a shoddy report filled with easily
disprovable, and in some cases, downright false assertions,” said Amit Narang, regulatory
policy advocate at Public Citizen.

Many of the citations in the report have not been peer-reviewed and come from sources
that receive funding from corporate interests that stand to directly benefit from
deregulation, Narang said.

Not only does CEA ignore independent, peer-reviewed sources that show no trade-off
between regulations and economic growth, it ignores almost two decades of Office of
Management and Budget figures showing the benefits of regulation to the public always
outweigh the costs to corporations, Narang said.

The CEA report also makes no mention of the “biggest job killer in recent memory,”
which is the lack of Wall Street regulation that led to the 2008 financial collapse,
Narang said.

$2 Trillion Costs Challenged

The CEA report cites a study conducted in 2014 for the National Association of Manufacturers
by W. Mark Crain and Nicole Crain estimating that in 2012, the total cost of federal
regulations to the U.S. economy was $2.03 trillion.

The Small Business Administration’s Office of Advocacy sponsored a similar study by
the Crains in 2010, which found that the total cost of federal regulations in 2008
was $1.75 trillion. Three years later, after substantial criticism of its assumptions
and methodology, the SBA withdrew its support of the study.

“No regulation supported by an analysis as flimsy as this CEA report would ever see
the light of day,”
said Sam Berger, senior policy adviser at the Center for American Progress. “The Trump
administration only cares about industry’s costs, not about regulatory benefits for
everyone else.”

To contact the reporter on this story: Cheryl Bolen in Washington at
cbolen@bna.com

To contact the editor responsible for this story:
Paul Hendrie at
pHendrie@bna.com

All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to books@bna.com.

Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)

Notify me when updates are available (No standing order will be created).

This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to research@bna.com.

Put me on standing order

Notify me when new releases are available (no standing order will be created)